Exhibit 8.1
April 14, 1999
BT Financial Corporation
BT Financial Plaza
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Merger Agreement
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Dated as of February 23, 1999
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By and Between BT Financial Corporation and
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First Xxxxxxx Financial Corporation,
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Ladies and Gentlemen:
We have acted as counsel for BT Financial Corporation in connection
with the proposed merger (the "Merger") of First Xxxxxxx Financial Corporation,
a Delaware corporation ("First Xxxxxxx") with and into BT Financial Corporation,
a Pennsylvania corporation, ("BT Financial") pursuant to an Agreement and Plan
of Reorganization dated as of February 23, 1999, (the "Merger Agreement") by and
between BT Financial and First Xxxxxxx under which each issued and outstanding
share of First Xxxxxxx common stock, par value $2.50 per share (the "First
Xxxxxxx Common Stock") will be converted into the right to receive common stock
of BT Financial (the "BT Financial Common Stock").
In that connection, you have requested our opinion regarding the
taxability of the BT Financial Common Stock received by the holders of First
Xxxxxxx Common Stock (in the aggregate the "Sellers") as a result of the Merger.
In providing our opinion, we have examined the Merger Agreement and the Proxy
Statement/Prospectus contained in the Registration Statement dated April 14,
1999 and such other documents and corporate records as we have deemed necessary
or appropriate for purposes of our opinion. In addition, we have assumed that
(i) the Merger will be consummated in accordance with the provisions of the
Merger Agreement, (ii) the statements concerning the Merger set forth in the
Merger Agreement are true, correct and complete and will continue to be true,
correct and complete at all times up to and including the closing date of the
Merger (the "Closing Date"), (iii) the representations made to us by the BT
Financial and First Xxxxxxx in their respective letters to us each dated the
date hereof, and delivered to us for purposes of this opinion are true, correct
and complete and will continue to be true, correct and complete at all times up
to and including the Closing Date (such letters, the "Representation Letters"),
(iv) BT Financial and First Xxxxxxx will complete all actions as represented in
the Representation Letters that are to be completed after the Closing Date, and
(iv) any representations made in the Representation Letters, the Merger
Agreement, and the Proxy Statement/Prospectus "to the best knowledge of" or
similarly qualified are correct, and will continue to be true, correct and
complete at all times up to and including the Closing Date, in each case without
such qualification. If any of the above-described assumptions are untrue for any
reason or if the Merger is consummated in a manner that is inconsistent with the
manner in which it is described in the Merger Agreement or the Proxy
Statement/Prospectus, our opinions as expressed below may be adversely affected
and may not be relied upon.
Based upon the foregoing, in our opinion, for U.S. Federal income tax
purposes,
(a) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
(b) First Xxxxxxx and BT Financial will each be a party to the
reorganization as defined in
Section 368(c) of the Code;
(c) neither First Xxxxxxx nor BT Financial will recognize gain or
loss because of the Merger;
(d) Sellers will not recognize gain or loss on the exchange of the
First Xxxxxxx Common Stock for the BT Financial Common Stock pursuant to the
Merger.
With respect to cash received for fractional shares, it is our opinion
the difference between the cash received and the portion of the tax basis in the
shares of the First Xxxxxxx Common Stock surrendered that is allocable to the
fractional shares will be capital gain or loss, assuming the First Xxxxxxx
Common Stock is held as a capital asset, as defined by Section 1221 of the Code
by the Seller.
The opinions expressed herein are based upon existing statutory,
regulatory and judicial authority, any of which may be changed at any time with
retroactive effect. In addition, our opinions are based solely on the documents
that we have obtained, the statements contained in the Representation Letters,
and the assumptions referred to above, all of which we have assumed will be
true, correct and complete (without regard to any "to the best knowledge of" or
similar qualification) as of the effective time of the Merger. Our opinions
cannot be relied upon if any of the facts pertinent to the Federal income tax
treatment of the Merger stated in such documents or in such additional
information is, or later becomes, inaccurate, or if any of the statements
contained in the Representation Letters, or the assumptions referred to above
are, or later become, inaccurate. Finally, our opinions are limited to the tax
matters specifically covered hereby, and we have not been asked to address, nor
have we addressed, any other tax consequences of the Merger or any other
transactions.
This opinion is being furnished to you for use in connection with the
Form S-4 filed by BT Financial in connection with the Merger (the "Form S-4").
We consent to the filing of this opinion as an exhibit to the Form S-4. We also
consent to the references to Xxxxxx Xxxxxxxx LLP under the headings "Certain
Material Federal Tax Consequences" and "Opinion of Xxxxxx Xxxxxxxx as to certain
tax matters" which is filed as Exhibit 8.1, in the proxy statement/prospectus
forming a part of the Form S-4.
Very truly yours,
/s/ Xxxxxx Xxxxxxxx LLP
